By: Mark H. Shore, Esq., Stearns, Roberts & Guttentag, LLC

All contractors and subcontractors work with contracts. It’s the nature of the industry. Written contracts are essential for providing direction relative to work to be performed and payment for that work. Yet, like everything in life, nothing ever seems to stay permanent. Changes are common-place in construction contracts and expectedly, many of these contracts permit modification on the condition that the change be in writing. So how does the Court system treat a situation when a contract clause requires that a change be in writing, no such writing is ever prepared, yet specific interactions between the parties appear to cause actual contract changes?

The Court system in Florida has generated a lot of case authority which provides guidance in situations where contracts have language that they are not to be changed in the absence of a signed modification. The truth is that generally, written contracts which expressly require that a modification be in writing, may in fact be changed under certain circumstances, even in the absence of such writing.

Our Court system has fortunately long-recognized that parties, and notably contractors and subcontractors, will continue to alter their initial plans and understandings, often without a writing, no matter what a piece of paper may say to the contrary. Because of this awareness, Florida Courts, in specific circumstances, have permitted non-written changes to written contracts even where a contract provision prohibits any modification except by a writing. How does this occur?

A contract that appears to prohibit any changes may generally be modified by a subsequent writing signed by the parties. It may also be changed through oral agreement. There is a third means by which a contract change may occur, notably, through the subsequent conduct of the parties. Such conduct, or course of dealing, especially when coupled with an oral agreement which supports the parties’ understandings and intentions, can be especially persuasive in establishing that a contract change occurred, was accepted, and should be paid for.

There are numerous examples shedding light on the issue. In the case of Beach Higher Power Corp. v. Granados, 717 So. 2d 563, 565 (3 DCA 1998), the Court said, “[t]he law has clearly been established that a written contract may be modified by a subsequent oral agreement or subsequent conduct of the parties, even though the written contract purports to prohibit such modification.” See also the case of Pan American Engineering Co. v. Ponchos Construction Co., 387 So. 2d 1052 (5 DCA 1990). In that case, and despite a contract prohibiting non-written modifications, the Court permitted a subcontractor to introduce oral agreement and course of dealing evidence to justify performance undertaken as a result of oral change orders. That same evidence was then used to establish reimbursable sums which the Court said were due and owing by the contractor. Another notable case on this issue is Doral Country Club, Inc. v. Curcie Bros., 174 So.2d 749 (3 DCA 1965). In that case the Court determined that a construction contract provision requiring written authorization for extras or additions could be waived, and thus the contract could be, and was, changed by oral agreement and the course of dealing between the parties.

The cases referred to above are for illustrative purpose only. While it would be generally preferred to abide by the clear language of a governing contract, subsequent oral understandings and course of conduct may occur, possibly resulting in contract changes. Like all matters in law where any disputed issue develops, or whenever doubt arises as to what one’s next prudent step should be concerning a contract, it is always wisest to consult with legal counsel.

About the Author: Mark H. Shore has been practicing law and litigating for the past thirty years. He is an associate with Stearns, Roberts & Guttentag, LLC. Mr. Shore concentrates his practice in contract, construction, and commercial disputes. He can be reached for consultation at [email protected].

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